IDEAS home Printed from https://ideas.repec.org/p/hhs/bergec/2012_009.html
   My bibliography  Save this paper

Care Or Cash? The Effect Of Child Care Subsidies On Student Performance

Author

Listed:

Abstract

Many countries have implemented childcare subsidies in an effort to help families; in the United States, the government created the Child Care and Development Fund in 1996, which provides public funds for childcare assistance to low-income families. Despite the importance of the issue, little is known about the effect of childcare subsidies on parent and child outcomes. Research in this area has been limited because of the difficulty identifying the causal effect of childcare price on later outcomes; for example, higher childcare prices may be associated with better childcare or wealthier parents, in which case one cannot isolate the effect of price alone on later child outcomes. This paper uses recent data and a novel source of identifying variation--sharp discontinuities in the price of childcare by income in Norway--to identify the effect of childcare subsidies on parental behavior and the later academic achievement of children. There are a number of papers that have examined the effect of childcare subsidies on female labor force participation, with the findings ranging from no effect to significant negative effects (See Blau, 2000, for a summary). More recently, work by Herbst and Tekin (2010b) has examined the effect of childcare subsidies in the United States on children’s academic performance.1 They use a unique identification strategy, applying distance to the nearest social service agency that administers the subsidy application process as an instrument for subsidy receipt. They find small negative effects of subsidy receipt the year before kindergarten on kindergarten performance, although these negative effects have generally disappeared by third grade.2 Our work complements this

Suggested Citation

  • Black, Sandra E. & Devereux, Paul J. & Løken, Katrine V. & Salvanes, Kjell G., 2012. "Care Or Cash? The Effect Of Child Care Subsidies On Student Performance," Working Papers in Economics 09/12, University of Bergen, Department of Economics.
  • Handle: RePEc:hhs:bergec:2012_009
    as

    Download full text from publisher

    File URL: https://www.uib.no/filearchive/w.p.09.2012_1.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs In Economics," Working Papers 1118, Princeton University, Department of Economics, Industrial Relations Section..
    2. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    3. Erdal Tekin, 2007. "Childcare Subsidies, Wages, and Employment of Single Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    4. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    5. Katrine V. Løken & Magne Mogstad & Matthew Wiswall, 2012. "What Linear Estimators Miss: The Effects of Family Income on Child Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 1-35, April.
    6. Milligan, Kevin & Stabile, Mark, 2007. "The integration of child tax credits and welfare: Evidence from the Canadian National Child Benefit program," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 305-326, February.
    7. Janet Currie, 2009. "Healthy, Wealthy, and Wise: Socioeconomic Status, Poor Health in Childhood, and Human Capital Development," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 87-122, March.
    8. Jens Ludwig & Douglas L. Miller, 2007. "Does Head Start Improve Children's Life Chances? Evidence from a Regression Discontinuity Design," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 159-208.
    9. repec:oup:restud:v:79:y::i:3:p:933-959 is not listed on IDEAS
    10. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
    11. Herbst, Chris M. & Tekin, Erdal, 2010. "The Impact of Child Care Subsidies on Child Well-Being: Evidence from Geographic Variation in the Distance to Social Service Agencies," IZA Discussion Papers 5102, Institute for the Study of Labor (IZA).
    12. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
    13. Dan Maurice Levy & Greg Duncan, 2000. "Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling," JCPR Working Papers 168, Northwestern University/University of Chicago Joint Center for Poverty Research.
    14. Guido Imbens & Karthik Kalyanaraman, 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," Review of Economic Studies, Oxford University Press, vol. 79(3), pages 933-959.
    15. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, July.
    16. Maria Donovan Fitzpatrick, 2010. "Preschoolers Enrolled and Mothers at Work? The Effects of Universal Prekindergarten," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 51-85, January.
    17. Berlinski, Samuel & Galiani, Sebastian & Gertler, Paul, 2009. "The effect of pre-primary education on primary school performance," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 219-234, February.
    18. Tekin, Erdal, 2005. "Child care subsidy receipt, employment, and child care choices of single mothers," Economics Letters, Elsevier, vol. 89(1), pages 1-6, October.
    19. Gordon B. Dahl & Lance Lochner, 2005. "The Impact of Family Income on Child Achievement," NBER Working Papers 11279, National Bureau of Economic Research, Inc.
    20. Pål Schøne, 2004. "Labour supply effects of a cash-for-care subsidy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(4), pages 703-727, December.
    21. Berlinski, Samuel & Galiani, Sebastian & Manacorda, Marco, 2008. "Giving children a better start: Preschool attendance and school-age profiles," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1416-1440, June.
    22. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
    23. David Blau, 2003. "Child Care Subsidy Programs," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 443-516 National Bureau of Economic Research, Inc.
    24. David Blau & Erdal Tekin, 2007. "The determinants and consequences of child care subsidies for single mothers in the USA," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 719-741, October.
    25. Tarjei Havnes & Magne Mogstad, 2011. "No Child Left Behind: Subsidized Child Care and Children's Long-Run Outcomes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 97-129, May.
    26. Løken, Katrine V., 2010. "Family income and children's education: Using the Norwegian oil boom as a natural experiment," Labour Economics, Elsevier, vol. 17(1), pages 118-129, January.
    27. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    28. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Felfe, Christina & Lalive, Rafael, 2012. "Early Child Care and Child Development: For Whom it Works and Why," IZA Discussion Papers 7100, Institute for the Study of Labor (IZA).
    2. Christian Raschke, 2016. "The Impact of the German Child Benefit on Household Expenditures and Consumption," German Economic Review, Verein für Socialpolitik, vol. 17(4), pages 438-477, November.
    3. Douglas Almond & Janet Currie & Valentina Duque, 2017. "Childhood Circumstances and Adult Outcomes: Act II," NBER Working Papers 23017, National Bureau of Economic Research, Inc.
    4. Figlio, D. & Karbownik, K. & Salvanes, K.G., 2016. "Education Research and Administrative Data," Handbook of the Economics of Education, Elsevier.
    5. Havnes, Tarjei & Mogstad, Magne, 2015. "Is universal child care leveling the playing field?," Journal of Public Economics, Elsevier, vol. 127(C), pages 100-114.
    6. Siflinger, Bettina & van den Berg, Gerard, 2016. "The Effects of a Universal Child Care Reform on Child Health – Evidence from Sweden," Annual Conference 2016 (Augsburg): Demographic Change 145765, Verein für Socialpolitik / German Economic Association.
    7. Anna Busse & Christina Gathmann, 2018. "Free Daycare and Its Effects on Children and Their Families," SOEPpapers on Multidisciplinary Panel Data Research 958, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Herbst, Chris M., 2013. "Universal Child Care, Maternal Employment, and Children's Long-Run Outcomes: Evidence from the U.S. Lanham Act of 1940," IZA Discussion Papers 7846, Institute for the Study of Labor (IZA).
    9. Kerris Cooper & Kitty Stewart, 2017. "Does Money Affect Children’s Outcomes? An update," CASE Papers /203, Centre for Analysis of Social Exclusion, LSE.
    10. Christina Felfe & Natalia Nollenberger & Núria Rodríguez-Planas, 2015. "Can’t buy mommy’s love? Universal childcare and children’s long-term cognitive development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(2), pages 393-422, April.
    11. Drange, Nina & Telle, Kjetil, 2015. "Promoting integration of immigrants: Effects of free child care on child enrollment and parental employment," Labour Economics, Elsevier, vol. 34(C), pages 26-38.
    12. Daniela Vuri, 2016. "Do childcare policies increase maternal employment?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 241-241, March.
    13. Sebastian Martinez & Pablo Celhay & Cecilia Vidal & Julia Johannsen, 2017. "Paying Patients for Prenatal Care: The Effect of a Small Cash Transfer on Stillbirths and Survival," IDB Publications (Working Papers) 8475, Inter-American Development Bank.
    14. Inés Hardoy & Pål Schøne, 2015. "Enticing even higher female labor supply: the impact of cheaper day care," Review of Economics of the Household, Springer, vol. 13(4), pages 815-836, December.
    15. Kertesi, Gábor & Kézdi, Gábor, 2012. "A roma és nem roma tanulók teszteredményei közti különbségekről és e különbségek okairól
      [The Roma/non-Roma test-score gap in Hungarian education]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 798-853.
    16. Lars-Erik Borge & Jørn Rattsø, 2017. "Local Economic Consequences of Investment in Children: Capitalization of Child Care Services," CESifo Working Paper Series 6809, CESifo Group Munich.
    17. Datta Gupta, Nabanita & Simonsen, Marianne, 2016. "Academic performance and type of early childhood care," Economics of Education Review, Elsevier, vol. 53(C), pages 217-229.
    18. Andersland, Leroy & Nilsen, Øivind A., 2016. "Households’ responses to price changes of formal childcare," Discussion Paper Series in Economics 20/2016, Norwegian School of Economics, Department of Economics.
    19. Drange, Nina & Havnes, Tarjei & Sandsør, Astrid M.J., 2016. "Kindergarten for all: Long run effects of a universal intervention," Economics of Education Review, Elsevier, vol. 53(C), pages 164-181.

    More about this item

    Keywords

    Education; income subsidy; child care;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:bergec:2012_009. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kjell Erik Lommerud). General contact details of provider: http://edirc.repec.org/data/iouibno.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.